The concept of "beyond a reasonable doubt" seems not to make an impression even on the most brilliant and best-informed French observers of the United States, of whom Eric is surely one. In my view, Vance dropped the case not because he feared losing it but because he believed that going to court with a witness about whose testimony he had developed "reasonable doubts" would have been an abuse of prosecutorial power. However unlikely, he might have won such a case by carefully selecting a jury and playing to its prejudices (against a Frenchman, a wealthy banker, etc.). But such a victory would have been unconscionable.

In corporatist Europe, a new sort of alliance has emerged. The politicians want sovereign bonds rated risk-free in order to be able to borrow at very low interest rates and the banks want sovereign debt to be rated so risk-free that no capital is required against bank holdings of these assets. This was accomplished through an implicit commitment to bail out a government in the event that it has serious difficulty servicing its sovereign debt. This alliance may seem to benefit the insiders, both the politicians and the banks. But the implicit bond guarantees impose costs on the public. The economic system would work better if creditors bore the risk of the state’s default and set interest rates correspondingly high. That way, the state would no longer have an artificial advantage in debt markets over the private enterprises that borrow – an advantage on top of the advantage the state derives from its size and whatever reputation it can establish. And the governments will no longer be subsidized to take the risks caused by heavy debt levels.

The Sarkozy Proposals for reform of the international monetary system have addressed three problems: the instability of raw material prices, the instability of major exchange rates and the need for improved governance of the system. This critique is correct in my view and could be addressed if the dollar-euro rate were stabilized within limits with monetary coordination between the Fed and the ECB. The stabilization could be achieved with each country supporting the other countries currency at its lower bound. China could join the group to make it a triad, the DEY, which could be designated for a renewable period of ten years as the anchor for a global currency in which all IMF members are included.

Hmm. Sarkozy Proposals, in capital letters, no less. I guess I'll have to read the paper, still under embargo.

The man formerly known as "le hyperprésident," who liked to keep his "collaborateur" the prime minister discreetly in the background, yesterday allowed M. Fillon, whom he had once rebuked for saying that "France is bankrupt," to step forward and take full credit for bringing austerity to France. A good summary of the new taxes and other austerity measures can be found in English here. Two of Sarkozy's signature measures have now been fully undone. The detaxation of overtime is finished, at least on the employer's side, which means that there is no further incentive for employers to increase overtime hours (if there ever was one. So much for travailler plus pour gagner plus. And the tax shield reform, already rolled back, has now been replaced by a supplemental tax on high incomes. So much for incentives to the alleged "job creators."

In short, Sarkozy's version of neoliberalism is now finished, and France has entered the era of fiscal austerity. That this move comes at precisely the wrong moment, as growth has slowed to a standstill, doesn't seem to bother anyone in the government, so tight is the grip of conventional wisdom and so vivid the delusion of virtuous suffering that no one can quite believe that anything but good can come of the turn to rigor.

Of course there may be political method to economic madness. Conventional wisdom also says that to introduce rigor eight months before an election is to ensure defeat. But what Sarkozy has done is to deprive the left of its most potent campaign themes: that he is the president of la bande de Fouquet's, that he has piled up huge debts, etc. He also forces the left to fight on his terrain, and the Socialists seem eager to fall into the trap, since they, too, are speaking of nothing but sober budget management. Each candidate is vying to be "more responsible" than the next. One can only imagine the tediousness of debates between the slashers and the cutters. It's almost enough to make one long for les années folles of presidential junkets to Luxor. But those days are gone forever.

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I have been a student and observer of French politics since 1968. In that time I've translated more than 130 books from the French, including Tocqueville's Democracy in America and Thomas Piketty's Capital in the 21st Century. I chair the seminar for visiting scholars at Harvard's Center for European Studies and am a member of the editorial board of French Politics, Culture, and Society and of The Tocqueville Review/La revue Tocqueville. You can read some of my writing on French politics and history here and a short bio here. From time to time I will include posts by other students of France and French politics (accessible via the index link "guest"). My hope is that this site will become a gathering place for all who are interested in discussing and analyzing political life in France. You can keep track of posts on Twitter by following "artgoldhammer".